PhilaPort establishes itself as the go-to port for produce
Perhaps one statistic is all that is needed to illustrate the fact that when it comes to produce, PhilaPort leads the way as the go-to port for perishables.
“At most ports, refrigerated containers make up a single-digit percentage of the total,” said Dominic O’Brien, senior marketing manager at PhilaPort. “Here in Philadelphia, it is 54 percent.”
In fact, O’Brien said that the entire PhilaPort facility is designed around the produce trade. From its close proximity to major population centers on the East Coast to its high concentration of repack facilities to its on-dock U.S. Customs inspection center, produce importers would be hard-pressed to find a facility that offers the breadth of services that cater specifically to their perishable cargo.
O’Brien said that the greater Delaware River port community actually encompasses three separate entities – Pennsylvania, New Jersey and Delaware – that together account for $6.6 billion in total food imports, with fruits and vegetables accounting for more than $4 billion of that total. And while PhilaPort is a good neighbor in the port community, he unabashedly singles out Philadelphia as the most important cog in the Delaware River region.
To back up that claim, O’Brien said PhilaPort container volumes have shown a compound annual growth rate of 12 percent per year for the past 10 years.
“This is the result of two things – Americans’ unquenchable desire for fresh and healthy fruits and vegetables, and the fact that other ports are not as efficient and people were looking for better alternatives,” he said.
In 2021, PhilaPort had 16 percent growth overall, according to O’Brien. While some other ports, such as Charlotte, Norfolk and New York/New Jersey showed a larger percentage growth for the year, they were coming back from substantially down years, while Philadelphia had growth in 2018, 2019, 2020 and 2021.
“So we showed additional growth on record volumes,” he said.
With 60 percent of the cargo coming from Latin America, O’Brien said PhilaPort doesn’t have the peak season issues that occur at other ports. “We offer high-velocity throughput during the pre-holiday season and usually better availability of equipment, which normally leads to fewer demurrage issues than at other ports,” he added.
Like no other port
The main reason that PhilaPort stands apart from other ports is its expertise and efficiency in handling perishables.
One of the factors that contributes to that is the large number of repack facilities in the area. O’Brien said he knows of no other port that has close to the number of repackers nearby, including Americold (Lucca), Greenyard Logistics, Holt Logistics, Kopke, Manfredi, Nanko/Procacci) and Sunrise Logistics.
“When fruit comes in from Chile or Peru or wherever, much of it will go to a repack house, where it is graded, repacked and labeled,” he said. “Buyers may have different standards. But the workers can be trained to those standards, and it is cheaper and more efficient than flying a QC person to Chile or Peru to perform that service at the farm.”
He added that over the decades, repack houses have grown in size and importance, with many adding ripening rooms, labeling services, and distribution to secondary and tertiary markets.
Another big advantage for importers is the fact that U.S. Customs has an on-dock inspection site (also known as a CES), so fruit can go straight from the ship to a CBP inspector and then on its way to the final destination in an expedited manner. This is ideal for containers that need intensive inspection.
O’Brien said that 72 hours prior to cargo leaving a foreign port, the shipper or customs house broker must provide information to U.S. Customs about what is in the shipment, who owns it, where it came from and where it is going. If Customs determines a container needs to be examined, it will perform an x-ray. If any anomalies are detected, it may be flagged for an intensive inspection, whereby the entire container is unloaded and examined.
Other aspects of the infrastructure at PhilaPort also make the facility a top choice for perishable cargo, according to O’Brien.
For one, the equipment on site is high-quality and modern, including 2,400 permanent reefer plugs at the Packer Ave. Marine Terminal, with plans to add more. It also has a number of portable units to help with overflow needs.
Additionally, its location near major interstate highways and rail facilities means produce can be on its way to major metropolitan areas in a short amount of time after arriving at the port.
These factors have played a crucial role in the Taiwanese shipping line Wan Hai adding Philadelphia to its service corridor, which O’Brien said is a huge victory for PhilaPort.
“This new service from Wan Hai will give us a direct link to Vietnam, China and Taiwan,” he said. “I think in the past, the ocean lines thought they could just service the Philadelphia market from New York. Now, they are thinking they can service the New York market from Philly. There is a lot of potential for refrigerated and frozen coming out of Asia. We’ve gotten close a couple of times before, but there has been a great deal of interest the past couple of years, especially in light of all the investments we have made.”
Speaking of investments, O’Brien went on to list some of the capital improvement projects that will soon be underway, including:
- A new PhilaPort distribution center ($50 million)
- The densification of the Packer Ave. Marine Terminal ($50 million)
- A new berth at Southport ($70 million)
- Additional dock warehousing ($100 million)
- Land acquisition and development ($60 million)
- Tioga gantry crane upgrades ($4.75 million)
Additionally, he said that there are two sites nearby that are in the process being turned into warehouse hubs. One, a 1,200-acre site formerly occupied by a Sunoco refinery, is being developed by HILCO. The other, a former steel mill a bit north of the city in Falls Township, PA, is a multi-building project known as the Keystone Trade Center being developed by NorthPoint Development.
“Warehousing in major metropolitan areas is tricky,” said O’Brien. “But by luck, we are blessed to have an old industrial site that used to be a Sunoco oil refinery and is now being developed by HILCO. They had similar success developing a site in Baltimore, so they are really good at taking old sites and rehabbing and remediating them.”
He said that when this project is complete, it will provide an ideal place to construct refrigerated warehouses that are located very near the port terminals and rail service.
“There are some frozen warehouses already being planned and I would hope some refrigerated warehouses will follow,” he said.
For the Keystone development, O’Brien said NorthPoint is planning 14 million square feet of new distribution center space, meaning two of the largest distribution center complexes in the nation will be within a very short drive to the port.
“I challenge anyone to find another major metropolitan area that has this much warehousing space being developed in such close proximity to the port,” he said.